The study of neural induction addresses a fundamental question, in development: How is the fate of ectodermal cells directed toward the formation of neural tissue and away from the formation of epidermis? Answering this question has led to much interest in elucidating the signal transduction pathways involved in the formation and patterning off the vertebrate nervous system. A number of molecules have been defined that are involved in neural formation, but many steps in the pathways remain unknown. Two proteins expressed early in response to neural induction are Sox2 and Sox3, members of the Sox family of HMG box transcription factors. These proteins have been implicated in maintaining a neural progenitor population; both genes are expressed in proliferating neural cells and down-regulated when these cells differentiate into specific neural cell types. By studying their regulation and function we will identify steps necessary for the induction, proliferation and differentiation of neural tissue. Our Specific Aims are to: (1) identify cis-regulatory modules of Sox2 and -3 using 'promoter bashing' and transgenesis (2) identify regulatory factors that interact with the cis sequences of these genes through the candidate gene approach and (3) use gain and loss of function studies to characterize their roles in neural induction and proliferation. These studies will be done in Xenopus laevis and X. tropicalis as much of our knowledge of neural formation comes from embryological studies on the frog and improved transgenic capabilities allow for the rapid identification of regulatory elements and networks. Combined with molecular assays and comparative computational analysis we will study the regulation of Xenopus Sox2 and 3 and define their role in neural development.